Supplier Enablement

Honey, I shrunk the invoices

I have a buying organisation that has asked me for information on what savings could be achieved by a supplier if they removed paper from their order to invoice process.

The buyer has data on their before (paper) and after (no paper all electronic) costs.

Why the sudden interest? Ordinarily a buyer is focussed on what their savings are and making sure they achieve that at the smallest cost to them, often that is achieved by putting costs on the supplier. When a supplier presents an electronic invoice I can process that at a fraction of the cost of a paper invoice and the supplier meets the cost to create that electronic invoice. Honey, I've shrunk the cost of our processing our invoices. But at what cost to your suppliers?

This blog has previously dealt with the debate: who pays and how much?

If, and it is a big IF, we had transaparency and an agreement between between buyers and suppliers as to what they recorded as savings from replacing paper transactions with electronic transactions then would that change things?

For example, buyer records savings of £5 and supplier records savings of £2. The savings for either could not have been achieved without the collaboration of the buyer and supplier so should they share the resulting benefit equitably? In this case buyer pays supplier £1.50. Now we have an incentive in place.

Last thought: Don't call you boss Honey, at least not without a lawyer present.

posted by FrankB @ Tuesday, November 28, 2006